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Thursday, Jan 27, 2022

Musk Rails Against State Aid as Tesla Pulls Application for $1.28 Bln in Subsidies for Berlin Plant

Musk Rails Against State Aid as Tesla Pulls Application for $1.28 Bln in Subsidies for Berlin Plant

Back in January, the European Union approved a plan that would grant several companies, including Tesla Inc. and BMW AG, a total of €2.9 billion ($3.5 billion) in state aid for battery projects that would strengthen the 27-nation bloc's capacity to produce more electric vehicles. The series of projects are slated for completion by 2028.

Tesla announced on Friday that it has withdrawn its application for state aid associated with the Gigafactory Berlin-Brandenburg, Tesla's first European manufacturing location and the electric vehicle and clean energy company's "most advanced, sustainable and efficient facility yet."

The company was expected to receive around €1.14 billion ($1.28 billion) in funding from the EU, according to a plan that was in its final stages.

A Tesla spokesperson confirmed to CNBC that the company withdrew its candidacy for funds allocated for the EU's 'Important Projects of Common European Interest.'

"Tesla has informed the Federal Ministry of Economics and the Brandenburg Ministry of Economics... it is withdrawing its IPCEI application for state funding for the battery factory in Grünheide," the spokesperson detailed.

Construction plans for the plant have not been impacted by the decision, the spokesperson clarified.

A view shows the entrance to the construction site of the future Tesla Gigafactory in Gruenheide near Berlin, Germany, August 12, 2021


Tesla CEO Elon Musk responded to the news via Twitter on Friday, replying to a netizen who expressed positive feelings about the electric vehicle and clean energy company not being dependant on government subsidies.

"It has always been Tesla’s view that all subsidies should be eliminated, but that must include the massive subsidies for oil & gas," Musk tweeted.

"For some reason, governments don’t want to do that …" he added.


According to the German government, Tesla is investing approximately €5 billion (5.66 billion) in its Berlin-based plant.

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